Vehicle Leasing 101 - Top Ten Car Lease FAQs
What is an Auto Lease? How Does Leasing a Car Work?
Do you want to know what is vehicle leasing? or how does leasing a vehicle work, then you're in good company. Not everyone is familiar with all the pros and cons of leasing a car. There are, in fact, many auto leasing alternatives available these days.
In general, vehicle leasing is the rental of a car for a fixed period of time. Many car and truck dealers offer vehicle leasing as an another option to traditional auto purchase or financing. It is often utilized by companies when acquiring business vehicles. In general, leasing costs less than buying a car, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to lease or buy a vehicle.
Today we are going to look at our ten most commonly asked questions regarding vehicle leasing.
Is It Better to Lease or Buy a Car?
Is Leasing a Car a Good Idea?
How Much Does It Cost to Lease a Car?
Can You Lease a Used Car?
Can One Get a Deposit Back When Auto Leasing?
May I Buy the Car I am Leasing?
Can You Lease A Car With Bad Credit & No Money Down?
What Kind Of Credit Score Do You Need To Lease A Car?
Is Maintenance Included With My Car Lease?
Can I Turn In My Leased Vehicle To A Different Dealer?
The short answer to this question is: 'it depends'. Do you drive a lot of miles annually? Do you like to keep your vehicle for a long time? If so, then car leasing might not be your best option. However, if you look forward to getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your personal, automotive and financial priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it's already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
There are many benefits of leasing a car that you just can't get with other auto financing offers. Benefits like maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For even more details on the benefits of car leasing, our car finance department is standing by to answer all of your questions.
If you're wondering how much does it cost to lease a car, the good news is that it's negotiable. Most dealerships and manufacturers offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify individuals from these types of leases. Factors like credit scores, credit payment history, etc. Just remember that paying zero down typically means higher monthly payments. Car leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
Yes, you actually can lease a used car. This type of 'used car leasing' is a little known 'secret' among car dealers but most do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles on the odometer.
Typically a deposit is refundable at the termination of a lease. This assumes that all the leasing contract requirements have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the exact same thing as a down payment. Down payments are not refundable but security deposits typically are. It is important to note some leases require non-refundable deposits. Be sure to read your lease agreement diligently and ask questions before you sign on the dotted line.
Most auto lease contracts have buy-out clauses in them in case you fall in love with your vehicle and decide to purchase it. Keep in mind the purchase price of the vehicle may vary. This depends on the residual value of the vehicle when the lease agreement has expired. There are options to purchase your leased car prior to the completion of the contract. For this, however, you will need to speak with a leasing representative. Only they can provide this exact info and take care of any early termination fees that may apply.
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don't worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.
Generally speaking, credit score of 619 or lower is classified as "subprime". While this type of credit won't typically be automatically declined, a 619 or lower credit score means you will most likely have to pay a higher interest rate and/or down payment. Luckily, there are various steps you can utilize to improve your credit score such as making on-time payments, consistent employment history, and applying for loans too many times.
Maintenance provisions are one of the most popular benefits of leasing a car. Specifics will vary within specific lease contracts, but almost all leases will cover normal wear-and-tear service and maintenance needs for your leased vehicle. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It's probably obvious, but you can't turn a leased car into any other brand of dealership. You can, however, turn your leased Nissan into any authorized Nissan dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Contact a Car Leasing Expert TodayIf you have more questions about vehicle leasing, current promotions, or related topics, then contact us today. Our team of leasing specialists are waiting to answer all your questions.
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Vehicle Leasing 101 - Top Ten Car Lease FAQs | Mike Smith Nissan